Originally Published: August 10, 2018 3:01 p.m.
Prescott’s long-term livability
Developers of big expansion projects, like Jason Gisi of Arizona Eco Development, love to tout local financial benefits of their ventures. They talk about the “millions of dollars in positive revenue” they will generate through “development impact fees, construction permit fees, bed tax, rent tax,” and “retail sales tax,” etc. “for many years to come.” While there is truth in these claims, they are far from the full picture. When cash-strapped cities like Prescott green-light major developments, they experience a modest, short-term illusion of wealth in exchange for enormous long-term liabilities.
Mutually beneficial agreements between the developer and the city ensure that they both profit from the initial construction of infrastructure like: streets, water and sewer systems, parks, and fire stations, etc. Initially, this appears to be a win-win, but down the road, as the new infrastructure begins to age, it is the city that is left holding the bag. A quick look at Prescott’s Public Works “Five-Year Capital Improvement Plan Summary” reveals that the vast majority of planned expenditures are for projects termed: “preservation,” “reconstruction,” “upsizing,” “update,” “rehabilitation,” “improvement,” etc. All of these expenditures address maintenance of aging infrastructure. Prescott is not alone; this is a nation-wide problem. Long-term revenue simply does not keep pace with the cost of infrastructure replacement. Large-scale development operates like a classic Ponzi scheme, with ever-increasing rates of growth necessary to sustain long-term liabilities. When considering annexations, Prescott needs to be mindful that our city’s short-term needs don’t outweigh and endanger our community’s long-term livability.